TRANSMISSION UPGRADES & EXPANSION: KEYS TO MEETING LARGE CUSTOMER DEMAND FOR RENEWABLE ENERGY
Prepared by David Gardiner and Associates for the Wind Energy Foundation
January 2018 TRANSMISSION UPGRADES & EXPANSION: KEYS TO MEETING LARGE CUSTOMER DEMAND FOR RENEWABLE ENERGY
January 2018
A project of the Wind Energy Foundation
Wind Energy Foundation David Gardiner and Associates 1501 M Street NW, Suite 900 2101 Wilson Blvd. Suite 550 Washington, DC 2005 Arlington, VA 22201 202-552-8105 703-717-5590 2 | TRANSMISSION REPORT TABLE OF CONTENTS
I. INTRODUCTION 5
II. EXECUTIVE SUMMARY 6
III. CORPORATE DEMAND FOR RENEWABLE ENERGY IS GROWING 9
IV. THE CENTRAL U.S. LEADS THE NATION IN RENEWABLE ENERGY PRODUCTION AND POTENTIAL 12
V. POWER PURCHASE AGREEMENTS, WHICH DEPEND ON TRANSMISSION, ARE ENABLING CORPORATE PURCHASERS TO PROCURE RENEWABLE ENERGY 15
VI. PLANNING AND DEVELOPING TRANSMISSION REQUIRES FEDERAL, 17 STATE, AND LOCAL COORDINATION 18 State Authorities 18 Federal Authorities Planning Coordinators 18 Utilities 19 Merchant Transmission Developers 19
VII. DC AND AC TRANSMISSION LINES: TECHNOLOGIES AND PRIMARY BUSINESS MODELS 20 Corporate Purchasers & Other Stakeholders Are Calling for Transmission Expansion 21
VIII. TRANSMISSION UPGRADES AND EXPANSION ARE NEEDED TO MEET 22 GROWING CORPORATE DEMAND Analysis of How Transmission Can Meet Corporate Renewable Procurement Goals and RPS Demand 22 Corporate Demand and Transmission Scenarios 23
IX. TRANSMISSION PLANNERS SHOULD CONSIDER CORPORATE RENEWABLE DEMAND 24
X. EXPANDING TRANSMISSION PROVIDES ADDITIONAL BENEFITS 25 Cost Savings 25 Grid Reliability 27 Air Quality Improvements and Carbon Emission Reductions 27
XI. CASE STUDIES 28 PJM: Clean Line's Grain Belt Express will unlock renewable resources to meet corporate demand 28 MISO: Multi-Value Project (MVP) Portfolio will help corporate energy buyers in the Midwest access renewables 30 ERCOT: CREZ lines enable Amazon & other corporate purchasers to procure renewable energy SPP: 32 Hitchland-Woodward Transmission Line enables Google to procure low-cost renewable energy 34
XII. CONCLUSION 36
XIII. RESEARCH METHODOLOGY 37
XIV. APPENDIX A: INTERVIEWS 37
XV. ACKNOWLEDGEMENTS 38
TRANSMISSION REPORT | 3 4 | TRANSMISSION REPORT Figure 1. Map of Regional Transmission Organizations (RTO)/ Independent System Operators (ISO)
I. INTRODUCTION
This report examines the opportunity to meet large customer demand for renewable energy through transmission upgrades and expansion. The need for this report is driven by two key emerging trends: (1) demand from large corporations is growing rapidly, as many are choosing renewable power to meet their existing needs as well as supply new demand; and (2) renewable energy is more affordable Source: U.S. Federal Energy Regulatory Commission (FERC), than ever, but customers’ access to this https://www.ferc.gov/industries/electric/indus-act/rto.asp affordable energy is constrained by inadequate transmission planning. Figure 2. Land-Based and Offshore Annual Average The report examines opportunities across Wind Speed at 80 m four key Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs): the Electric Reliability Council of Texas (ERCOT), the Midcontinent Independent System Operator (MISO), the PJM Interconnection (PJM), and the Southwest Power Pool (SPP). These four RTOs are of particular interest because they span geographic regions with high on-shore wind resources (especially ERCOT and SPP), as illustrated in Figure 2.1 The Wind Energy Foundation commissioned this report on behalf of its A Renewable America campaign.
Source: National Renewable Energy Laboratory, http://bit.ly/2zSUGFv
TRANSMISSION REPORT | 5 II. EXECUTIVE SUMMARY
This report examines the need to expand and upgrade U.S. transmission lines to meet the significant renewable energy demand of large non-utility customers, especially from Fortune 500 companies.
Investment in transmission infrastructure is essential to support not only significant additions of renewable generation to meet corporate and other demand, but also for the longer-term electrification of transport, heating, and cooling. We found that: (1) renewable energy commitments from large corporations are growing rapidly and will lead to significant renewable energy procurement through 2025; (2) most of the best renewable energy resources are in a 15-state central U.S. region, while load growth is highest outside the region; (3) expanded and upgraded transmission is needed to unlock new low-cost renewable energy for corporate and other consumers; and (4) transmission planners should account for corporate demand.
KEY FINDINGS:
Corporate commitments to procure Transmission expansion and upgrades are needed to renewable energy are growing rapidly and spur enough renewable energy development to meet are projected to continue to do so. this growing demand, and can provide other benefits.
• Renewable energy procurement from large • The strongest and often lowest-cost renewable energy institutional buyers, including many Fortune resources are located in the central U.S. region, 15 500 companies, has increased considerably states between the Rockies and the Mississippi River: in recent years and is one of the most Arkansas, Colorado, Iowa, Kansas, Louisiana, Minnesota, dramatic recent changes in electricity Missouri, Montana, Nebraska, New Mexico, North markets.2 Since 2013, U.S. corporations have Dakota, Oklahoma, South Dakota, Texas, and Wyoming. signed nearly 9 gigawatts (GW) of long-term wind and solar power contracts (equal to • This region accounts for 88 percent of the country’s wind over 16 conventional power plants and technical potential and 56 percent of the country’s enough electricity to power over 7.5 million utility-scale solar photovoltaic technical potential, yet is homes).3 home to only 30 percent of projected 2050 electricity demand (see Section IV). This finding suggests that • The Renewable Energy Buyers Alliance future transmission is needed to export this electricity (REBA), representing more than 100 U.S. from this high-production region to the growing demand corporate buyers, set a goal to deploy 60 GW outside of this region. of new renewable energy capacity in the U.S. by 2025 —equal to 110 conventional power • Transmission upgrades and expansion provide large plants and enough electricity to power nearly non-utility customers access to low-cost renewable 50 million homes.4 Considering the 9 GW of energy through power purchase agreements (PPAs). renewable energy already procured by • Increasing the supply of renewable energy through corporate purchasers since 2013, there is at transmission can deliver cost savings, grid reliability least 51 GW remaining in this goal. benefits, and greenhouse gas (GHG) emissions • These companies have a variety of reasons reductions to all customers. for increasing their demand for renewable • Upgrading and expanding the existing transmission energy, such as lower costs, price risk network would also relieve congestion problems and reductions, and corporate environmental could lower costs for non-PPA consumers.5 initiatives.
6 | TRANSMISSION REPORT Transmission planning fails to account for the rapid KEY RECOMMENDATIONS: increase in corporate and other institutional demand and does not focus adequately on the need to transmit Corporate buyers and other large institutional renewable electricity from the central U.S. region customers should: to the rest of the country or on remote high-quality renewable resource areas within each region. • Encourage transmission planners and state Public Service Commissions to increase access • Current transmission planning accounts for predicted to affordable, renewable energy by approving customer demand, known power plants and their upgrades and expansion to transmission lines; locations, grid reliability issues requirements, and public policy requirements, such as state and federal • Participate in regional and inter-regional environmental and clean energy standards. transmission planning conversations to ensure future transmission infrastructure meets • Transmission planners may, in rare instances, account customer demand for renewable energy; and for voluntary goals, such as statements by Governors, but do not account for the growing voluntary demand • Urge FERC to continue work to improve the from large corporate purchasers. interregional planning processes consistent with Order 1000. • Transmission planning is performed in fragmented sub-regions of the country, mainly through the Regional Transmission Organizations. Large amounts Operators of Regional Transmission of potential wind and solar energy are lost every day Organizations and others involved in in America’s heartland due to the lack of interregional transmission planning should: transmission planning to deliver them to markets in • Incorporate voluntary, large customer demand the East and West. There are particular challenges in transmission planning. associated with transferring electricity from the Eastern Interconnection to the Western Interconnection, which • Strengthen planning across RTOs and other can be done today through limited direct-current regional planning authorities to ensure efficient interconnections, but future improvements could interregional transmission. enable a unified national power grid.
TRANSMISSION REPORT | 7 8 | TRANSMISSION REPORT III. CORPORATE DEMAND FOR RENEWABLE ENERGY IS GROWING
Over the past several years, corporate demand for renewable energy has risen sharply as many companies have made public commitments to power their operations with renewable energy or to reduce their greenhouse gas emissions. Perhaps most notably, in May 2016, a coalition representing over 100 corporate energy buyers (the “Renewable Energy Buyers Alliance” or “REBA”) announced a goal to purchase 60 gigawatts (GW) of new renewable energy capacity in the U.S. by 2025. REBA collaborates with RE100, a group of corporate purchasers committed to source 100 percent of their power from electricity, which includes notable members such as Anheuser-Busch InBev, BMW, General Motors (GM), Johnson & Johnson, and Procter & Gamble (P&G).6 This 60 GW goal is used as the basis for the analysis in Section VIII.
Since 2013, corporate buyers have procured 9 GW of renewable energy through power purchase agreements (PPAs).7 Even though PPAs have been the predominant procurement mechanism for much of the renewable energy already contracted by corporates, looking forward, a mix of both PPAs and utility products will likely be necessary to achieve the ambitious 60 GW goal. Utilities around the U.S. are currently developing tools, such as green tariffs, that allow corporates to purchase renewable energy directly through their utility. For example, recently in Kansas, Westar Energy and Kansas Gas and Electric Co. have proposed a new renewable energy tariff aimed at commercial and industrial customers that would provide wind capacity less expensively than the utilities' current offerings.8
TRANSMISSION REPORT | 9 Other groups and recent surveys have similarly As a result of these commitments, corporate renewable energy tracked corporate demand for renewable energy procurement has increased significantly in the last decade. Between using different metrics, finding that: 2008 and 2016, U.S. corporations signed more than 10 GW of long- term wind and solar power contracts—equal to 18 conventional • Forty-eight percent of Fortune 500, power plants and enough electricity to power over 8 million and 63 percent of the Fortune 100, homes (Figure 3).13 As mentioned, the bulk of that contracted have set targets to reduce GHG renewable capacity—9 GW—has been acquired since 2013. Indeed, emissions, improve energy efficiency, these significant purchases from non-utility customers are one 9 and/or increase renewable energy. of the most disruptive trends in the electricity market. In fact, Fortune 500 clean energy targets corporate and other non-utility customers (including the U.S. Army have increased 5 percent since and universities), accounted for 52 percent of all wind capacity 10 2014. contracted through PPAs signed in 2015, and 39 percent in 2016.14 • Among 160 of the largest global manufacturers with a U.S. footprint: Figure 3. Renewable capacity contracted by corporations by (1) 40 companies (25 percent) have technology, 2008-2016 (MW) established a renewable energy target and 18 companies (11 percent) have established a 100 percent renewable energy target; and (2) 132 manufacturers (83 percent) have established goals to curb their GHG emissions—a precursor to acquiring renewable energy, according to a recent study by David Gardiner and Associates.11 The 40 companies with renewable energy targets account for 659 factories in the U.S.
• Seventy companies support the Source: Bloomberg Finance 2017 Sustainable Energy in America Factbook Corporate Renewable Energy Buyers’ Principles, aimed at spurring utilities Large companies are leading the way in non-utility renewable and regulators to increase corporate energy purchases. customer access to renewable energy. • In 2016, Amazon signed PPAs for 650 MW of clean energy; Amazon’s 228 MW PPA with Lincoln Clean Of a recent survey of 153 large corporate buyers Energy for the Amazon Wind Farm Texas was the (public and private), 128 (or 84 percent) are largest signed in 2016 and brings Amazon’s cumulative actively pursuing or considering purchasing U.S. deals to 1.2 GW.15 renewable energy over the next five to ten years.12 • In September 2017, GM announced a 200 MW wind These commitments demonstrate that large purchase which will power all of the company’s Ohio customers and their ambitious climate and energy and Indiana manufacturing facilities.16 Once the targets will help sustain demand for renewable turbines come online by the end of 2018, renewable energy and act as market drivers throughout the energy will power 20 percent of GM’s global electricity 2020s. Further, potential voluntary demand from use. corporates is as much as three time greater than projected RPS-driven demand, as discussed in • Companies like Google (1.9 GW signed in total in Section VIII. 2016), Microsoft (500 MW signed in total in 2016) and Walmart (500 MW signed in total in 2016), Kimberly- Clark (245 MW PPA signed in 2017), and Anheuser Busch InBev (152.5 MW PPA signed in 2017) also continue to lead in this space.17,18,19
10 | TRANSMISSION REPORT Companies are investing in renewable energy Competitive pricing, the ability to lock in contract prices for 20 primarily because it is increasingly the lowest cost years or longer, and other key drivers have stimulated corporate option, as wind and solar are often the cheapest demand for wind and solar. Companies are also motivated to sources of new generation. Today’s wind costs invest in renewable energy to: are one-third what they were in 2009, falling 67 percent, from $140/MWh to a range of $30-60/ • Stabilize energy pricing and reduce risks of long- MWh in just eight years.20 The cost of utility-scale term price volatility; solar has declined even more dramatically, falling • Address demand from investors and customers; 86 percent since 2009 to today’s range of $46-53/ MWh (Figure 4).21 Note that the charts in Figure 4 • Reduce risks of climate change to operations and are based on levelized cost of energy (capital costs supply chains; plus operating costs per MWh) and do not reflect the full advantage of renewable energy in the bulk • Minimize carbon emissions and other air pollutants power markets, where pricing is driven exclusively from their energy usage; by variable operating costs, which are effectively • Demonstrate corporate leadership, innovation, zero for renewable energy. Therefore, renewable competitive first-mover advantage, and to keep up energy is even more cost-competitive than is with growing trends from competitors and peers. reflected here.
Figure 4. Unsubsidized Levelized Cost of Energy—Wind & Solar PV (Historical)
Source: Lazard, 2017, Levelized Cost of Energy Analysis—Version 11.0
TRANSMISSION REPORT | 11 IV. THE CENTRAL U.S. LEADS THE NATION IN RENEWABLE ENERGY PRODUCTION AND POTENTIAL
The majority of renewable energy production is occurring, in the central U.S. region between the Rockies and the Mississippi River—in Montana, Wyoming, Colorado, New Mexico, North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, Texas, Minnesota, Iowa, Missouri, Arkansas, and Louisiana.22 Currently, there is 53,893 MW of installed wind capacity in this region, about 66 percent of all installations, as shown in Figure 5. Only 14,214 MW were installed in states east of those states to date (17 percent of total), and 13,949 MW in to the west (17 percent of total).
Figure 5. U.S. Installed Wind Power Capacity, by State (MW)
Source: AWEA, U.S. Wind Industry Fourth Quarter 2016 Market Report
12 | TRANSMISSION REPORT This region also includes the five states producing the largest percentage of their power from wind turbines – Iowa, Kansas, South Dakota, Oklahoma, and North Dakota – as well as Texas, the largest wind power producer in absolute terms.23
Projected new wind capacity is and will be located in this region. Most wind capacity currently under construction is concentrated in Texas, New Mexico, Oklahoma, and Wyoming (Figure 6). A total of 10,822 MW of wind capacity is under construction in those four states. Texas alone is responsible for 38 percent of total construction activity, as indicated in Figure 6.
Moreover, the greatest future potential for both wind and solar resources is also located in this region and across the Southern U.S. (Figure 7). This region accounts for 88 percent of the country’s wind technical potential and 56 percent of the country utility-scale solar PV technical potential (Table 1). However, the majority of future load growth is located in areas outside this region. Thus, as discussed later in this report, these regions should develop additional transmission lines to meet that demand, as well as the growing corporate demand.
Figure 6. U.S. Wind Capacity Under Construction (MW)
Source: AWEA, U.S. Wind Industry Third Quarter 2017 Market Report
TRANSMISSION REPORT | 13 Figure 7. Locations of Energy Resources and Population Centers The “central U.S. region” contains most of the technical potential for wind and solar development, but low projected load growth. These 15 renewable energy-rich states comprise approximately 88 percent of total technical potential for onshore wind power and 56 percent of total technical potential for utility-scale solar photovoltaics (Table 1). However, they only account for 30 percent of future electricity demand in 2050, according to projections from the U.S. Energy Information Administration. The remainder of electricity demand in 2050—70 percent—is projected to be
Source: NREL, 2017, Interconnections Seam Study from states outside of this region.
A fully integrated national transmission grid is technically feasible. It would require joining the three existing transmission interconnections – Eastern, Western, and ERCOT – either by strengthened direct-current interties or by synchronizing their alternating currents and providing high-voltage interconnections between major systems. In the future, it may well be possible for wind-generated energy in the Midwest and Plains states to help meet the fast-ramping demand peak in California illustrated by the celebrated “duck curve,” even as solar energy generated in the desert Southwest has earlier in the same day helped meet early-evening peak demands on the East Coast.
As mentioned, the potential level of corporate demand for renewables may reach up to 60 GW—demand that is not typically accounted for in transmission planners’ load growth projections, as further described in Section IX. And these corporations would be interested in purchasing cost-competitive power from renewable projects in the central U.S. region. These findings underscore the importance of expanding and upgrading transmission in the areas of best technical potential to deliver the lowest-cost energy resources to the grid. It is important to note that in-state transmission may also be needed to bring energy to the grid, depending on the location of the generating facilities.
Table 1. Comparison of Total Technical Potential for Onshore Wind and Utility-Scale Solar PV by Region24
Total Technical Potential for Total Technical Potential for Projected Electricity Projected Electricity Region Onshore Wind Powera (%) Utility-Scale Solar PVb (%) Sales, 2050 (billion kWh)c Sales, 2050 (%) Central U.S. 88% 56% 1,341 30% Region
Other 12% 44% 3,133 70% aAWEA, U.S. Wind Industry Fourth Quarter 2016 Market Report b NREL, https://www.nrel.gov/docs/fy12osti/51946.pdf c EIA, https://www.eia.gov/outlooks/aeo/tables_ref.php
Further, in some areas, wind energy curtailment continues to occur, in part, as a result of transmission congestion or a lack of transmission access. For example, on April 24, 2017, when SPP set the North American record for producing the most wind at 54.47 percent or approximately 11,300 MW of wind output, it still curtailed 789 MW of wind.25 This finding suggests transmission expansion either within the region or connecting to neighboring regions is needed to provide more customers with access to inexpensive renewable energy.
14 | TRANSMISSION REPORT V. POWER PURCHASE AGREEMENTS, WHICH DEPEND ON TRANSMISSION, ARE ENABLING CORPORATE PURCHASERS TO PROCURE RENEWABLE ENERGY
A power purchase agreement (PPA) is a contract between two parties, one which generates electricity (the seller) and one which is looking to purchase electricity (the buyer). The PPA defines the commercial terms for the sale of electricity between the two parties, such as the schedule for delivery of electricity and payment terms. Corporate energy buyers may choose either a physical or virtual PPA based on a combination of factors, including: access to retail electricity choice; ability to act as wholesale energy customers; relative location of energy demand to economic wind projects; timing of retail energy procurement contracts; and expected lifetime of facilities with energy demand.26 In either case, as explained below, these transactions require delivery of power through high-voltage transmission lines.
TRANSMISSION REPORT | 15 In a physical PPA, power is “physically” delivered to the Since the renewable energy project and the buyer do buyer, and the renewable energy project and the buyer not need to be in the same grid region, virtual PPAs are must be located in the same grid region. Therefore, the appealing to buyers located in states that do not permit need for transmission is implicit in a physical PPA; without direct retail access, as well as for buyers where it’s too costly adequate transmission to allow for the development of to act as wholesale market participants. However, because renewable project, physical PPAs would not happen. deals can only be struck when a developer can get their product to market via transmission infrastructure, VPPAs are still only Physical PPAs are limited to buyers that can sign PPAs possible with transmission. as either retail or wholesale market participants.27 As a wholesale electricity customer, a company that signs a A recent study of corporate wind PPAs of at least 20 MW physical PPA buys the renewable energy produced at in size signed through the third quarter of 2016, found wholesale prices—not as a traditional retail customer.28 that companies with the highest levels of wind energy procurement have tended to sign physical PPAs.32 On One way that a company can act as a wholesale a capacity basis, about 52 percent of the wind power electricity customer is by becoming a wholesale power contracted through corporate PPAs to date is through 29 marketer. Wholesale power marketers have the ability physical PPAs, while the remaining 48 percent is contracted to sign physical PPAs and buy energy at wholesale through virtual PPAs.33 However, the overall trend among market prices, subsequently reselling the energy to corporates is moving toward VPPAs. Corporate customers wholesale customers and retaining the associated signing virtual PPAs currently outpace those signing physical 30 renewable energy credits (RECs). PPAs by a ratio of nearly 4:1.34 Although wind energy is the preferred PPA technology for corporates currently, A virtual PPA (VPPA), also known as a synthetic or many companies are entering into solar PPA contracts as financial PPA, is a financial arrangement between a well, such as Apple, which has contracted 130 MW of solar renewable energy project and a buyer, with the buyer through a PPA with First Solar.35 owning the project’s RECs. Under a VPPA, a buyer enters into a contract to pay a renewable energy project owner VPPAs are particularly advantageous in situations where an agreed price for energy generated, and then the the customer’s energy demand is split into many small and project owner sells the generated power into the local separate locations or when the customer’s energy demand is wholesale market on a merchant basis. The project located in a state where renewables are not available, either owner pays the company if the electricity is sold into because of a lack of local supply or where the electricity the market above the agreed contract price, and the market makes customer procurement difficult or impossible company pays the project owner the difference if the (i.e., where PPAs are not allowed).36 However, companies 31 electricity falls below the agreed price. Thus, a VPPA also occasionally enter into VPPAs from within the same grid acts as a price hedge, as the buyer is insuring itself from region, as the costs associated with becoming a wholesale future price increases. Of course, if wholesale prices fall, market participant may make PPAs less attractive.37 the buyer will not receive gains.
16 | TRANSMISSION REPORT VI. PLANNING AND DEVELOPING TRANSMISSION REQUIRES FEDERAL, STATE, AND LOCAL COORDINATION
Building a transmission line can require the involvement of a number of several different parties, including state, regional and federal authorities, Planning Coordinators, utilities, and transmission developers. The role played by each of the actors in this process is detailed in the following sections.
A key barrier to bringing more renewable energy on line is the absence of transmission planning across RTOs and other regional planning authorities. The U.S. has three large interconnections, but transmission planning is typically performed at the RTO level. To ensure efficient interregional transmission, FERC should consider removing barriers to consumer access to low-cost resources by facilitating interregional planning on a large scale. This policy recommendation has also been endorsed by groups such as Americans for a Clean Energy Grid—a diverse coalition of stakeholders working to enhance effective regional transmission development.38
TRANSMISSION REPORT | 17 State Authorities Order 1000, which places a series of requirements on transmission planners, including requiring transmission Each state holds the primary regulatory responsibility providers to participate in a regional transmission planning for siting transmission lines within their borders and has and cost allocation process which takes public policy 39 its own process for granting permission to build power drivers into account. lines. State siting authorities must consider many factors Specifically, Order 1000 establishes several requirements in approving transmission lines, including the overall for transmission planning, including: need for a new line, environmental impacts, property rights, and cost. Once a state gives siting approval, the • Each public utility transmission provider transmission developer is subsequently allowed to build must participate in a regional transmission the transmission line and, if necessary, use the power of planning process that satisfies the outlined eminent domain to do so. transmission planning principles and produces a regional transmission plan. A combination of state and local government agencies oversees the siting approval process in each state. There • Local and regional transmission planning is no universal approach for how states approve the siting processes must consider transmission of new transmission lines. Several states, for example, needs driven by public policy requirements combine siting approval under a single agency, such as established by state or federal laws or a Public Utilities Commission (PUC). Other states have regulations. Each public utility transmission a dedicated siting authority that approves transmission provider must establish procedures to projects. identify transmission needs driven by public policy requirements and evaluate proposed Although state siting and permitting processes vary by solutions to those transmission needs. state, there are some common processes. Transmission developers submit an application to the state that includes • Public utility transmission providers in each an analysis of the need for the new line (e.g., to ensure grid pair of neighboring transmission planning reliability or connect new generation), cost estimates, and regions must coordinate to determine if there at least one proposed route. The PUC or siting authority are more efficient or cost-effective solutions then holds hearings—usually held in the impacted to their mutual transmission needs.40 communities—in order to determine the exact route of the line, address landowner and community concerns, and discuss alternatives to the proposed route. Most Planning Coordinators states combine the need and siting approvals into one Planning Coordinators include RTOs, government power decision from the PUC or siting authority. A key factor is authorities, and electric utilities that have the responsibility the underlying state law that state regulatory commissions of coordinating, facilitating, integrating, and evaluating must abide by in their decisions. In some cases, utility transmission facilities. There are approximately 80 regulation is embodied in state constitutions. In a number Planning Coordinators across the U.S. (created by the of instances, multi-state or regional transmission projects North American Electric Reliability Corporation, or NERC), have been hindered by state law requirements in a transit seven of which are U.S. Independent System Operators state prohibiting regulators from approving a project that (ISOs) or Regional Transmission Organizations (RTOs). does not bring commensurate benefits to customers in that state. Voluntary RTOs and ISOs have formed in many regions of the U.S., including California (CAISO), Southwest (SPP), Midwest (MISO), Mid-Atlantic (PJM), New York (NYISO), New Federal Authorities England (ISO-NE), and Texas (ERCOT). RTOs do not own transmission facilities. Instead, they plan and operate the The Federal Energy Regulatory Commission (FERC) is transmission system in accordance with NERC and regional an independent regulatory agency which regulates the reliability criteria on behalf of their member transmission interstate transmission of electricity, natural gas, and oil. owners, ensure access to the transmission system, and FERC has broad authority to set policy for transmission manage and plan for the reliability of the transmission planning. In 2011, FERC issued an important ruling, system.41
18 | TRANSMISSION REPORT A major role of RTOs is to perform transmission to integrate its local transmission planning process planning to ensure that transmission will be reliable with the regional process. This utility-based model for as demand grows and generating plants are added or developing transmission projects has been less popular retired throughout the RTO footprint. RTOs typically for long distance transmission lines, which Public Utility operate regional wholesale energy markets, in which Commissions may not allow into the utility rate base. generators offer to provide energy and the lowest cost offers are accepted as long as the transmission system can reliably deliver the power. In these markets, energy Merchant Transmission prices on the transmission system will vary whenever Developers there is congestion on the transmission system and low-cost power plants in one region cannot fully reach Merchant transmission providers (including third-party the demand in another. The resulting higher energy developers) are private companies that finance and prices within congested regions provide an economic own transmission facilities independent of generation signal for new generating plants to be located in the developers or customer-serving utilities. Merchant high-priced area, or for additional transmission to be transmission projects have been largely comprised of long- constructed to alleviate the congestion. distance or submarine High Voltage Direct Current (HVDC) lines. With few utilities building long-distance transmission Each Planning Coordinator assesses the reliability of projects, merchant transmission developers have stepped its assigned region and coordinates planning with into the breach and proposed many of the long-distance adjoining regions. They evaluate, develop, document, transmission projects. and report on expansion plans for each individual transmission planning area within their regional Unlike utility projects, merchant transmission providers boundaries. The Planning Coordinator must also must recoup their costs through reservation charges paid assess whether the integrated transmission plan by generators and/or offtakers—a voluntary participant- meets reliability needs, and, if not, provide alternative funded model, rather than a ratepayer-funded model. The solutions. costs of constructing proposed transmission facilities of merchant transmission projects are recovered through negotiated rates instead of the cost-based rates used Utilities by utilities. Like utility projects, inter-state merchant transmission projects must obtain state siting approval Historically, because electricity production and (and in some cases federal approval), although in some distribution has focused on delivering electricity states the regulatory agencies involved may differ for within a state or service territory, electric utilities have merchant lines and utilities. For example, in Kentucky there developed and owned most transmission lines. The is a separate state siting board for merchant projects. utility is responsible for obtaining permission to build the new line from the appropriate state and local Since merchant lines are not asking for ratepayer support, authorities, and for providing a demonstration of need they are not part of the RTO transmission planning and the appropriateness of the proposed route, usually processes. However, they can be accounted for, like through the analysis and recommendations included generation additions and retirements, in forecasting. in the RTO or ISO in which the utility operates and/or through an integrated resource planning (IRP) process.
Once approved, the utility must raise the funds to construct the line, generally through a combination of internal cash flow and the issuance of bonds, and engage and oversee contractors to design and build the line. The utilities, who typically operate under cost-of-service rates, have been able to put the costs of transmission development into their rate base and earn a rate of return on it, as approved by state Public Utility Commissions—a ratepayer-funded model. The utility will work closely with the Planning Coordinator
TRANSMISSION REPORT | 19 VII. DC AND AC TRANSMISSION LINES: TECHNOLOGIES AND PRIMARY BUSINESS MODELS
Historically, the transfer of electricity between regions of the U.S. has been through high voltage alternating current (AC) transmission lines. In an AC line, both the voltage and the current move in a wave-like pattern along the lines and are continually changing direction. The voltage and current on a direct current (DC) transmission line, however, do not change direction as energy is transmitted.
The major advantage to DC transmission lines is their efficiency. DC power flows steadily through the wires without changing direction multiple times per second. Even though AC power is the primary power system in the U.S., DC transmission has the ability to move large amounts of power over long distances, lowering energy losses and using less land to do so, as DC transmission lines require narrower right-of-way footprints than AC lines. As such, DC transmission technology offers many benefits over long distances. AC transmission, however, gives broader network ability and grid flexibility.
Utilizing DC transmission to carry large amounts of renewables over long distances is energy and cost efficient. This can help to lower the delivered cost of energy and to enable renewable energy to compete against other power sources. DC transmission can also enhance system stability by giving the grid operator complete control over power flow on the DC line.
Typically, merchant lines utilize DC transmission technology, but not always. The merchant model is better suited than the utility model for long- distance DC lines that span multiple states, since utilities and RTOs would have to demonstrate benefits to ratepayers in order to gain project approval and proceed with cost recovery.
20 | TRANSMISSION REPORT CORPORATE PURCHASERS & OTHER STAKEHOLDERS ARE CALLING FOR TRANSMISSION EXPANSION
For a variety of reasons, large corporate buyers of renewable energy, policymakers, utilities, TOs and ISOs have begun to speak out publicly about the importance of expanding transmission to meet their demand for renewable energy at good prices.
“We believe that the ability to access cost- “This project benefited the region in more ways than effective renewable energy from a variety of we initially thought it would. At first the main benefit sources in TVA territory will strengthen the was increasing supplies into Wisconsin, but then the region’s business environment and further reliability dimension really started to come into play.” the economic and sustainability objectives of customers like us.” BRAD OACHS Vice president, Power Delivery and Transmission, Minnesota Power GENERAL MILLS, GM, IKEA, INGERSOLL RAND, KELLOGG’S, TECHNET, AND UNILEVER “Significant wind energy has come online in the Midwest since this project was energized. Without this line in place, much of this renewable electricity would have been trapped behind the congestion point at the Minnesota-Wisconsin border. With Arrowhead-Weston on the Plains and Eastern Clean Line in place, we can move more wind and hydro power Transmission Line, which would bring wind power from Oklahoma to consumers in the across the Midwest.” Southeastern and Mid-Atlantic U.S. DEDE SUBAKTI Manager, Regional Operations Engineers, MISO “The Grain Belt Express Clean Line is an opportunity to provide our companies “We should be saying, ‘solar, wind, transmission,’ with a link to low-cost renewable energy in the same breath. Transmission needs to be on equal at a scale that is meaningful… We believe footing and of the same stature as renewable forms of that the ability to access cost-effective energy because we won’t reach our goals without it.” renewable energy from a variety of WISCONSIN STATE REPRESENTATIVE PHIL MONTGOMERY sources in Missouri will only strengthen Current member and former chairman, Assembly Energy and the region’s business environment and Utilities Committee further the economic and sustainability objectives of customers like us.” “GM’s ability to access renewable energy is key to our GENERAL MILLS, GM, KELLOGG’S, NESTLE, decisions about where to expand new facilities. It’s P&G, TARGET, UNILEVER essential that transmission planners take the growing corporate demand for renewables into account in the planning process. Expanding and upgrading transmission is critical to help GM access low-cost renewable energy and meet our commitments.”
ROB THRELKELD Global Manager of Renewable Energy, General Motors on the Grain Belt Express Clean Line Transmission Line, which would bring wind power from Kansas to consumers in Missouri, Illinois, and surrounding states.
TRANSMISSION REPORT | 21 VIII. TRANSMISSION UPGRADES AND EXPANSION ARE NEEDED TO MEET GROWING CORPORATE DEMAND
Multiple studies have shown the need for more Analysis of how transmission transmission to enable the continued development of the lowest-cost renewable resources. For example, the can meet corporate renewable Department of Energy’s Wind Vision report assesses the procurement goals and RPS demand level of new transmission needed to meet 10 percent of the country’s end-use demand with wind by 2020, 20 DGA conducted an analysis to determine whether currently percent by 2030, and 35 percent by 2050.42 The report proposed transmission lines could meet corporate found meeting these goals would require 10 million MW- procurement goals and Renewable Portfolio Standard miles of incremental transmission capacity by 2030 and (RPS) demand for renewable energy. RPS demand is cumulatively 29 million incremental MW-miles by 2050.43 not the only demand that should be accounted for in For comparison, the existing transmission system in the transmission planning; voluntary utility procurement of United States totals approximately 200 million MW-miles.44 low-cost wind and solar resources will likely occur in the However, a key issue is that the U.S. must develop new years that this analysis considers, as both resources are transmission in the right places to transfer renewable now the lowest cost electricity option in many areas. This energy from the places where it is produced to the places procurement could be significant and will also need to where it is used. be factored into transmission planning, but is outside the scope of this report. Further analysis of ISO and RTO interconnection queues—which show the capacity seeking transmission We compared a high and low scenario for transmission interconnection—demonstrates significant amounts of construction with a high and low scenario for corporate wind and solar are seeking transmission access. In 2016, renewable energy procurement, with RPS demand 150 GW of wind and solar power capacity (equivalent to remaining the same across both scenarios. Our approximately 274 conventional power plants) entered methodology is outlined in the following section. interconnection queues compared to 40 GW of natural As shown in Table 2, when we compared the conservative gas (equivalent to approximately 73 conventional power and aggressive scenarios for transmission build to the high plants).45 Wind and solar comprised 78.9 percent of the and low corporate demand scenarios, we found: total resources seeking access to transmission.46 MISO and SPP experienced especially sizable additions in 2016.47 • The conservative transmission scenario would At the end of 2016, 142 GW of wind power capacity was meet only 42 percent of corporate renewable seeking transmission interconnection, representing energy demand in the high scenario and 78 34 percent of all generating capacity in the reviewed percent in the low demand scenario. interconnection queues—higher than all other generating sources.48 • The aggressive transmission scenario would meet 70 percent of high scenario Developing transmission requires detailed consideration for corporate renewable energy demand of benefits and costs, which are beyond the scope of this and over 100 percent in the low corporate report. But expanded transmission will benefit multiple renewable energy demand. parties in many ways (as discussed in Section X), and planners should consider its full range of benefits, as this • Transmission planners should ensure will aid in allocating the costs of the project. Further, more that future transmission build is able to potential projects could be planned and built with an accommodate a high corporate procurement improved FERC Order 1000 interregional planning process. scenario—one that the current “aggressive” scenario is not able to accommodate.
22 | TRANSMISSION REPORT Table 2. Percentage Demand Met by Proposed Transmission Lines
High Corporate Procurement Scenario Low Corporate Procurement Sce- Scenarios (51 GW), RPS Demand (15.5 GW)—66.5 nario (20 GW), RPS Demand (15.5 GW Total Demand GW)—35.5 GW Total Demand
Conservative Scenario (MW) [90% of planned transmission (Table 3) before 2020 is built, 20% 42% 78% of planned transmission after 2020 is built]
Aggressive Scenario (MW) [90% of all planned 70% 131% transmission (Table 3) is built]
The projected corporate procurement scenarios are significantly larger than the projected renewables needed to meet state RPS demand, which require utilities to supply a specified percentage of their electricity from renewable resources by a certain year.49 The American Wind Energy Association (AWEA) estimates RPS policies will drive the development of approximately 15.5 GW of new wind power capacity from 2017 through 2025.50 In the Low Corporate Procurement Scenario (20 GW), corporate procurement is nearly 1.3 times the size of the RPS demand and in the High Scenario (51 GW), corporate demand is nearly 3.3 times the RPS demand.
Corporate demand and transmission scenarios
The transmission construction in both the conservative and aggressive scenarios is based on the 14 proposed near-term transmission projects in advanced development that—if all were completed and fully subscribed—could carry 52 GW of new wind capacity, as shown in Table 3. Note that these lines will not exclusively serve renewable energy projects.
Table 3. Transmission Line Activity Serving Renewable Energy Projects
Voltage Estimated Estimated Potential Transmission Project Name (State) (kilovolts, kV) In-service Date Wind Capacity (MW)a
MISO Multi-Value Projects (ND, SD, IA, MN, WI, IL, MO, MI) 345, one 765 line 2015-2020 14,000
Grand Prairie Gateway (IL) 345 2017 1,000 Southline Transmission Project (NM, AZ) 345, 230 2018-2020 1,000 Power for the Plains (NM, TX, OK) 115, 230, 345 2016-2020 1,230 Pawnee—Daniels Park (CO) 345 2019 600 Gateway West (WY, ID) 500 2019-2021 3,000 Empire State Connector (NY) 320 DC 2020 1,000 Transwest Express (WY) 600 DC 2020 3,000 Sunzia (NM, AZ) 500 2020 3,000 Clean Line Projects (KS, OK, IA, NM, AZ) 600 DC 2020+ 16,000 Southern Cross (TX) 500 DC 2021 2,000
SPP 2012 ITP10 Projects (TX, OK, KS, MO) 345 2018-2022 3,500
Gateway South (WY, UT) 500 2020-2024 1,500 Boardman-Hemingway (OR, ID) 500 2022 1,000 Total Potential New Transmission Capacity ~52 GW Source: AWEA, 2016 Annual Market Report
a The values in this column reflect the amount of wind capacity that can be connected to the lines. In some cases (e.g., Clean Line Projects) this total exceeds the delivery capacity of the line (due to diversity in wind output and losses). Additionally, in some cases the lines could add MW of other types of generation, such as solar, with minimal curtailment.
TRANSMISSION REPORT | 23 It is possible that not all of these projects will be completed, especially on the project timeline proposed by the project developers. For example, transmission projects might be unable to obtain land use rights and rights of way. To account for that possibility, DGA developed two investment scenarios: a conservative scenario and a more aggressive scenario, summarized in Table 4. In the conservative scenario, we assume there is a 90 percent success rate for the current proposed transmission projects (summarized in Table 3) through the year 2020. We then assume the likelihood of post- 2020 transmission construction decreases to 20 percent of proposed lines. In the aggressive scenario, we assume there is a 90 percent success rate for all planned transmission lines, regardless of planned in-service date. This analysis assumes that all existing and planned transmission lines are fully subscribed.
Table 4. Transmission Line Activity Serving Renewable Energy Projects in Two Investment Scenarios
Projects in Service By Projects in Service After Total Wind Capacity Scenarios 2020 (MW) 2020 (MW) (MW) Total Estimated Potential Wind Capacity from 24,830 27,000 51,830 AWEA Market Report (MW) [Table 3]
Conservative Scenario (MW), [90%, 20%] 22,347 5,400 27,747
Aggressive Scenario (MW), [90%, 90%] 22,347 24,300 46,647
We then compared those transmission scenarios with a high and a low scenario for corporate procurement. In the high scenario, we assume 51 GW of new corporate procurement. This estimate is from the Renewable Energy Buyers Alliance (REBA), a group of more than 100 large corporate buyers of renewable energy, which has a collective goal to purchase 60 GW of new renewable energy capacity in the U.S. by 2025 minus the amount of renewable energy procured by corporate energy buyers since 2013 (9 GW), when the Business Renewables Center at the Rocky Mountain Institute began tracking corporate deals.51
Because it is possible that this goal will not be achieved in its entirety, DGA assumed only 20 GW in its low scenario. However, considering that certain renewable energy generation technologies (including wind and most types of solar), are already the lowest-cost options across the country,52 with projections suggesting costs will decline further in the coming years,53 the high procurement scenario may be more likely. Corporates, who are increasingly setting public renewable energy targets, have been effective at working towards their commitments to date, which makes the near-term procurement of renewables even more likely. Further, the public nature of these corporate announcements may lead companies to be even more likely to achieve their targets, as failure to meet them could result in negatively publicity.
IX. TRANSMISSION PLANNERS SHOULD CONSIDER CORPORATE RENEWABLE DEMAND
Among other factors, transmission planners consider both supply and demand elements in making their recommendations. On the supply side, they must include taxes and incentives that affect the amount of renewable energy supply, as well as retirements of existing plants and line congestion. On the demand side, they must include factors that would drive significant demand, such as requirements for renewable energy (i.e., RPS policies), which 29 states have and the level of utility procurement.
Interviews DGA completed with RTOs revealed that planners do not factor in corporate or other non-utility institutional demand for renewable energy in RTO transmission planning despite the growing demand. Instead, RTOs typically only focus on mandatory renewable energy requirements prescribed by RPS policies and other renewable energy requirements. If a state has a mandate, such as an RPS, or other public goals, that assumption is sometimes included in transmission planning models and some RTOs will build infrastructure to meet the mandate.
24 | TRANSMISSION REPORT However, in transmission planning, RTOs make little Upgrading and expanding transmission can reduce distinction between mandatory and voluntary state the cost of meeting the growing customer demand for policies; RTOs generally treat each the same as long as they renewable energy in two ways. First, it enables customers know the state policy.54 For example, if a Governor issues a to access a greater supply of potential low-cost projects voluntary goal to develop 1 GW of renewable energy in the from areas with lower-cost resources. Second, it can relieve state, some RTOs would typically include assumptions to congestion on transmission networks. Bottlenecks in the meet that 1 GW target in transmission planning models.55 transmission system can lead to project output being Although the goal may not be a mandate, it is a target that curtailed, reducing its revenues and effectively raising its would weigh heavily in utilities’ decision-making, and some cost per unit of delivered output. Expanded and upgraded RTOs would include it in the regional plan. Other RTOs transmission infrastructure can reduce such curtailments. do only what FERC requires, which is to “consider” public Transmission investments also facilitate robust wholesale policy and may ultimately opt not to include state RPSs or market competition, enable a diverse and changing energy other policies in their plans. portfolio, and mitigate damage by limiting customer outages during adverse conditions.58 An important conclusion of this analysis is the distinction some transmission planners make between voluntary Numerous studies show how transmission can save money renewable energy goals which a Governor may establish for customers. and the voluntary goals which large corporations and other non-utility electricity buyers may have established is largely In SPP: arbitrary. Planners should not only focus on meeting needs • Transmission upgrades installed between 2012 and established by Governors, but also those of the largest 2014 will create nearly $12 billion in net present electricity consumers. value benefits for consumers over the next 40 years, Furthermore, transmission planners should start or around $800 for each person currently served by incorporating corporate demand for renewables into SPP.59 These savings are 3.5 times greater than the their planning efforts now, as the time needed to develop cost of the transmission upgrades. The transmission transmission lines is typically five to seven years.56 FERC upgrades also contribute to a robust system that has already received extensive recommendations on how enables the effective integration and delivery of to strengthen the interregional planning processes, and renewables across a wide geographic area. In should also consider recommending that transmission their analysis, SPP found that 187 MW of new planners begin incorporating corporate demand into their wind farms installed in 2014 would not have been future interregional planning meetings.57 interconnected to SPP absent the new transmission projects included in the analysis.60
• SPP customers have saved $900 million since the X. Integrated Marketplace began in March 2014, with EXPANDING TRANSMISSION much of the savings resulting from lower fuel costs PROVIDES ADDITIONAL BENEFITS as utilities were able to draw from a wider variety of generation sources.61 According to Bruce Rew, vice president of operations at SPP, "[the Integrated Cost Savings Marketplace] allows us to optimize wind and low natural gas prices in our dispatch.” It is well-documented that upgrading and expanding transmission can save consumers, including large energy • Oklahoma Gas and Electric announced that its users not signing PPAs, on their electricity bills by providing customers would see lower bills (a reduction of $5 greater access to existing low-cost renewable energy for the typical residential customer) as the result resources and spurring further renewable development. of the benefits of SPP’s Integrated Marketplace, Further, transmission expansion and upgrades can: (1) which provided participants with net savings of 62 help meet state’s ambitious renewable energy goals in $380 million in its first year. Those savings would a cost-effective manner; (2) create market efficiencies, also not have been possible without adequate leading to consumer savings; and (3) pay for themselves by transmission facilities. reducing power losses and moving lower cost electricity to • Xcel Energy is refunding $18.6 million to Texas retail high demand areas. customers as a result of lower fuel and purchased power costs made possible by investments in SPP’s transmission system.63
TRANSMISSION REPORT | 25 In MISO:
• MISO has approved 17 projects to Specific transmission line projects also provide cost savings to ratepayers. upgrade and expand transmission For example: known as Multi-Value Project lines that will expand renewable power in the • The proposed Grain Belt Express Clean Line, which draws from an region and lower electricity prices.64 area of especially high wind speeds in Kansas, would offer wind at less than 4 cents/kWh to customers in Missouri and PJM territory. • MISO found that the transmission Currently, the average price of electricity to Missouri customers is upgrades are expected to: 11.60 cents/kWh (across all sectors).66 The Grain Belt Express Clean Line is discussed further in the Case Studies section of this report. -- Create $12.1 to $52.6 billion in net benefits over the next 20 to 40 • The Badger Coulee line in Wisconsin will provide access to low-cost years; electricity and spur the development of low-cost, fixed rate wind and solar projects – with consumer savings projected between $118 to -- Enable 52.8 million MWh of wind $700 million.67 energy to meet renewable energy mandates and goals through year • The Arrowhead-Weston line in Wisconsin gave utilities access to 2031; and low-cost electricity, saving $5.1 million for consumers in the first year -- Provide benefits in excess of its of the project, and translating to an estimated $94 million in cost 68 costs, with its benefit-to-cost ratio savings over 40 years. ranging from 2.2 to 3.4.65 • The ITC transmission line projects in Michigan saved customers Table 5 summarizes the quantified cost approximately $250 million in reduced cost to meet renewable benefits to customers for SPP and MISO. requirements and Midwest projects saved customers approximately $337 million.69
Table 5. Summary of Costs Saving Benefits of Transmission for SPP and MISO
RTO/ISO Description NPV Benefits for Consumers
SPP Transmission upgrades installed between 2012-2014 $12 billion over next 40 years
MISO Transmission upgrades currently underway $13 to 50 billion over next 20-40 years
Sources: SPP, The Value of Transmission, and MISO, MTEP14 MVP Triennial Review
26 | TRANSMISSION REPORT Grid Reliability Air Quality Improvements and Carbon Emission Expanding and upgrading transmission helps create a flexible Reductions electric grid that ensures reliability. Utilities around the country are already witnessing the reliability benefits of a robust transmission Delivering more renewable energy to system. For example, in December 2015, Southwestern Public corporate and other institutional customers Service Company (SPSC)—a member of SPP—was able to avoid would reduce emissions of carbon dioxide a widespread outage thanks to the flexibility afforded by recent (CO ) and other air pollutants. A recent study upgrades in their region. David Hudson, president of SPSC at a SPP 2 found that when using future anticipated board meeting stated, “We had a double fault at the Tolk coal plant costs for wind and solar, CO emissions from where both units tripped off. Before we had this transmission, we 2 the U.S. electricity sector can be reduced would have had a widespread outage. But we went right through by up to 80 percent relative to 1990 levels, it...It’s undeniable there’s significant savings going on with this without an increase in the levelized cost of transmission.”70 electricity.73 Moving away from a regionally Transmission upgrades that facilitate the integration of wind and divided electricity sector to a national system solar energy can help make the power system more flexible and enabled by high-voltage direct-current efficient. Transmission also facilitates the integration of renewable transmission would enable the U.S. to achieve energy by providing access to the best renewable sites and by this reduction in CO2 emissions, according to allowing power to be moved from region to region in response the report. to fluctuations in electricity supply and demand.71 Wider areas of Several studies have examined the effects of well-integrated transmission can also substantially mitigate the an expansion of clean energy transmission inherent variability of wind and solar generation, which fluctuates lines on carbon emissions levels. For example, in local areas with increases and decreases in wind speed or MISO found that new transmission could cloud cover. Wind and solar have proven reliable for planning and result in an almost 50 percent reduction in dispatch purposes over a full planning region such as an ISO or GHG emissions by 2050.74 In addition, a study RTO, as MISO and PJM have both learned. of the PJM region found doubling wind energy Improved transmission infrastructure would also help avoid and/or through increased transmission infrastructure defer future costs related to reliability upgrades and projects. For could deliver air quality improvements of 14 example, MISO estimates that over $300 million in future baseline percent for carbon dioxide (CO2), 10 percent reliability upgrades would be avoided by implementing the ISO’s for nitrogen oxides (NOx), and 6 percent for 75 72 transmission portfolio of Multi-Value Projects. sulfur dioxide (SO2).
TRANSMISSION REPORT | 27 XI. CASE STUDIES PJM Interconnection (PJM)
The Grain Belt Express Clean Line will deliver approximately 4,000 MW of low-cost, renewable power and enough clean energy for 1.6 million homes per year and equal to the power from eight conventional power plants.
PJM: CLEAN LINE'S Companies such as GM, Unilever, P&G, Kellogg, and Nestlé GRAIN BELT EXPRESS characterize the project as “an opportunity to provide our WILL UNLOCK companies with a link to low-cost renewable energy at a scale that RENEWABLE RESOURCES is meaningful.” TO MEET CORPORATE DEMAND
EXECUTIVE SUMMARY load serving entities that purchase transmission capacity on the line. The line will enable approximately $7 billion The Clean Line Grain Belt Express is a proposed 780-mile of new renewable energy projects, which could not high-voltage direct current (HVDC) transmission line that otherwise be built due to limitations of the existing electric will originate near Dodge City, Kansas and deliver power to transmission grid. Missouri, Illinois, and surrounding states. It is a multi-RTO project that would deliver 4,000 MW of low-cost renewable By utilizing DC technology, the Grain Belt Express will lower power in total (enough to power 1.6 million homes per energy losses when moving large amounts of power over year); 3,500 MW of which would be delivered to PJM. The long distances, while using less land than comparable AC line would also benefit MISO and SPP, primarily by relieving lines. The line will also result in improved electric reliability congestion. Several major retail and manufacturing by utilizing direct current converter stations, allowing companies with significant renewable energy procurement operators to control the flow of power.76 goals publicly support the project; these companies include General Motors, Target, Unilever, Procter & Gamble, Kellogg, Nestle, and Walmart. This support from corporate MAKING THE INVESTMENT renewable energy buyers represents a model of corporate As a merchant transmission developer, Clean Line’s engagement in transmission planning, which increasing investors are footing the costs of development. Clean corporate demand for renewable energy is driving. Line must seek approval of the Grain Belt Express from the Public Utility Commission in each state through which BACKGROUND AND CONTEXT it passes. Securing approval from all relevant regulatory bodies and stakeholders has been one of the most The Grain Belt Express is a participant-funded, merchant challenging aspects of the project. Kansas, Indiana, and model project. Its development and construction will be Illinois have approved the Grain Belt Express. Clean Line paid for by the renewable energy generators and is working through the process to obtain approval for
28 | TRANSMISSION REPORT the Grain Belt Express in Missouri. Demonstrating the Business support for the Grain Belt Express has been benefits of the Grain Belt Express for a diverse array of broad. In 2016, a group of companies with retail and stakeholders has been instrumental in securing approvals. manufacturing facilities across Missouri including General These benefits include cost savings, job creation, and Motors, Unilever, P&G, Kellogg Company, and Nestlé, pollution reduction. Specifically, the project is estimated to: joined in supporting the Grain Belt Express project. These companies, which collectively employ more than 10,000 • Deliver energy to Missouri at less than 4 cents Missourians and own dozens of facilities across the state, per kWh; each have corporate sustainability goals and are a part of a broader trend of companies around the country using their • Create more than 5,000 jobs to construct the purchasing power to call for more renewable energy. The transmission line and wind farms and more companies stated in its letter, "Access to renewable energy than 500 permanent jobs to maintain and is increasingly important to our decisions about where to operate the wind farms and the transmission expand and to site new facilities.” line; The Missouri Industrial Energy Consumers (MIEC), • Reduce CO emissions by 14 million tons per 2 an association of some of Missouri’s largest energy year, nitrogen oxide emissions (a contributor consumers, also commended the Grain Belt Express to smog) by 10,000 tons per year, and sulfur project. “Low energy prices allow Missouri businesses to dioxide emissions (a precursor to acid rain) by thrive and access to renewable energy is essential to many 22,000 tons per year.77 of our members’ sustainability goals,” said Diana Vuylsteke, • The project was $2.2 billion investment, who represents the MIEC on issues pertaining to energy. providing economic benefits for the states “It is imperative that we take advantage of free-market that host the line.78 solutions like the Grain Belt Express to meet our energy needs.”
TRANSMISSION REPORT | 29 CASE STUDIES Midcontinent Independent System Operator (MISO)
The MVP Portfolio was approved based on its ability to provide many benefits, including:
• Enable 41 million MWh of wind energy per year to meet renewable energy mandates and goals;
• Provide an average annual value of $1,279 million over MISO: MULTI-VALUE the first 40 years of service, at an average annual revenue PROJECT (MVP) requirement of $624 million; PORTFOLIO WILL • Maintain system reliability by resolving reliability violations on approximately HELP CORPORATE 650 elements for more than 6,700 system conditions and ENERGY BUYERS IN mitigating 31 system instability 85 THE MIDWEST ACCESS conditions. RENEWABLES
EXECUTIVE SUMMARY As a testament to the importance of transmission as a necessary component for renewable energy The relatively recent adoption of RPS policies and clean development—to deliver energy from rural areas to end energy goals across MISO’s footprint have resulted in the users in urban locations—GM has recently announced need for a more expanded and upgraded transmission a 200 MW wind purchase which will power all of the system to deliver renewable resources from often remote company’s Ohio and Indiana manufacturing facilities from renewable energy generators to load centers. wind farms located in Ohio and Illinois.80 Once the turbines come online by the end of 2018, renewable energy will To meet this increasing demand, MISO proposed the power 20 percent of GM’s global electricity use. This project Multi-Value Project (MVP) portfolio, which contains 17 would not have been made possible without a robust transmission projects that span eight states (Table 6). transmission system in MISO territory. These proposed lines collectively are estimated to: (1) provide benefits in excess of costs; (2) create $12.1 to $52.6 billion in net benefits over the next 20 to 40 years; and (3) enable 52.8 million MWh of wind energy to meet renewable energy mandates and goals through year 2031.79
30 | TRANSMISSION REPORT BACKGROUND AND CONTEXT
MISO’s recommended MVP portfolio is comprised of the 17 projects detailed in Table 6. The portfolio of projects will enable enough wind integration into the MISO footprint to fulfill RPS goals through at least 2026.81
Table 6. MISO Multi-Value Project Portfolio82
Project State Voltage (kV) In Service Year Cost (M, 2011$) 1 Big Stone-Brookings SD 345 2017 $191 2 Brookings, SD-SE Twin Cities MN/SD 345 2015 $695 Lakefield Jct.-Winnebago-Winco-Burt area & 3 MN/IA 345 2016 $506 Sheldon-Burt area-Webster 4 Winco-Lime Creek-Emery-Black Hawk-Hazleton IA 345 2015 $480 N. LaCrosse-N. Madison-Cardinal & 5 WI 345 2018/2020 $714 Dubuque Co.-Spring Green-Cardinal 6 Ellendale-Big Stone ND/SD 345 2019 $261 7 Adair-Ottumwa IA/MO 345 2017 $152 8 Adair-Palmyra Tap MO/IL 345 2018 $98 9 Palmyra Tap-Quincy-Merdosia-Ipava & Meredosia-Pawnee IL 345 2016/2017 $392 10 Pawnee-Pana IL 345 2018 $88 11 Pana-Mt. Zion-Kansas-Sugar Creek IL/IN 345 2018/2019 $284 12 Reynolds-Burr Oak-Hiple IN 345 2019 $271 13 Michigan Thumb Loop Expansion MI 345 2015 $510 14 Reynolds-Greentown IN 765 2018 $245 15 Pleasant Prairie-Zion Energy Center WI/IL 345 2014 $26 16 Fargo-Galesburg-Oak Grove IL 345 2018 $193 17 Sidney-Rising IL 345 2016 $90 Total $5,197
MAKING THE INVESTMENT
In 2017, MISO performed its second triennial review of the MVP Portfolio benefits. The MVP Portfolio was studied and approved in 2011 as a part of MISO’s annual transmission expansion plan, with a tariff requirement to conduct a full review every three years.83 The analysis found that the MVP projects would: (1) provide benefits in excess of its costs; (2) create $12.1 to $52.6 billion in net benefits over the next 20 to 40 years; and (3) enable 52.8 million MWh of wind energy to meet renewable energy mandates and goals through year 2031.84
TRANSMISSION REPORT | 31 CASE STUDIES The Electric Reliability Council of Texas (ERCOT)
Amazon’s 253 MW wind farm will bring 250 construction jobs and over $290 million in new investments to ERCOT: CREZ LINES Scurry County, Texas. Oncor’s $1 billion investment in the ENABLE AMAZON & CREZ line project that the Amazon wind farm uses created more than OTHER CORPORATE 1,500 peak year jobs and a pipeline to deliver stable low-cost wind PURCHASERS TO energy to over 400 communities. PROCURE RENEWABLE ENERGY
EXECUTIVE SUMMARY BACKGROUND AND CONTEXT
A long-time leader in wind power development, Texas is Amazon, the e-commerce and cloud computing company, home to some of the best wind and solar resources in the is not only a revolutionary force in business but in nation. In the early 2000s, state legislators recognized a corporate sustainability efforts as well. By purchasing need for additional transmission in West Texas and the stable, low-cost wind and solar energy, the company is Panhandle to enable more renewable development. The able to keep their energy costs down and pass the savings Public Utility Commission of Texas (PUCT), working with onto customers.86 In 2016, Amazon was the leading the Electric Reliability Council of Texas (ERCOT) and at the corporate purchaser of renewable energy in the U.S., direction of the state legislature, conceived and developed with 3.6 million MWh of renewable energy purchases Competitive Renewable Energy Zones (CREZ) to facilitate announced or projects commencing construction.87 the development of the state’s renewable assets. Amazon Web Services (AWS), a subsidiary of Amazon, has a long-term commitment to achieve 100 percent renewable Completed in 2014, the CREZ transmission lines have now energy usage for their global infrastructure footprint. enabled 18,000 megawatts (MW) of new capacity and AWS exceeded its goal of 40 percent renewable energy attracted billions of dollars in investment in the state from by the end of 2016, and set has a new goal of 50 percent wind and solar developers. Those projects, combined with renewable energy by the end of 2017. But achieving these the state’s deregulated energy market, have also garnered ambitious goals is likely dependent on the continued the attention of many large corporations seeking the expansion and upgrades to the nation’s transmission fixed-rate pricing and environmental benefits of renewable infrastructure. energy. As a result, at least 14 major corporations have purchased renewable energy from Texas projects. In the early 2000s, Texas faced a “chicken or the egg” dilemma as the wind industry began to take off.88 One such project, Amazon’s 2016 purchase of 90 percent Recent wind development had overwhelmed existing of the power generated from a 253 MW wind project in transmission, resulting in curtailment and network Scurry County, Texas was the company’s largest to date. congestion, and thwarting further investment.89 More The project, now known as Amazon Wind Farm Texas, was transmission was needed, but new lines were typically enabled by CREZ transmission lines and is projected to only built once a generator committed to building, and bring over 250 construction jobs and $290 million in new generators would only build once there was a commitment investment to the county. to build transmission.90
32 | TRANSMISSION REPORT To solve the issue, Republican State Senator Troy Frasier stimulating development of high quality projects at the introduced Senate Bill (SB) 20 in 2005, directing the PUCT least cost.98 In the two years following the completion of to implement a large-scale transmission build-out with CREZ projects, 2014 and 2015, an average of over 2,600 the goal of generating more capacity from renewables.91 MW of wind capacity was installed, compared to an The bill received bipartisan support, as conservatives average of 738 MW in the four years prior.99 in the West touted the economic development, while liberals in the East lauded its potential to lower electricity With the new lines in place, corporate purchasers like prices. A diverse set of energy and electric stakeholders Amazon, with large energy loads and ambitious clean also supported the bill, including Public Citizen, Direct energy targets, were increasingly drawn to Texas Energy, Texas Public Power Association, FPL Energy, and renewable energy projects. Corporate purchasers have the Association of Electric Companies of Texas.92 With now signed PPAs with at least 14 wind projects directly 100 overwhelming bipartisan support in the legislature, the bill connected to CREZ lines. easily passed in both chambers.93
After SB 20 became law, the PUCT tasked ERCOT with MAKING THE INVESTMENT identifying wind energy production potential statewide and the possible transmission constraints impeding its Amazon purchases 227.7 MW of the 253 MW project in delivery.94 Using ERCOT’s study, the PUCT developed a Scurry County known as Amazon Wind Farm Texas. The transmission system to optimize the vast wind resources project consists of over 100 turbines that will generate 101 in West Texas and the Panhandle.95 With construction over 1 million MWh of wind power annually. The wind beginning in 2009, the projects took 5 years to build and farm is expected to bring over 250 construction jobs cost $6.9 billion, but created a pipeline which delivered and $290 million in new investment to the county, and the abundant supply of low-cost wind power to areas of will connect to a portion of the CREZ line developed by 102 significant demand in the eastern portion of the state.96 Oncor Electric Delivery. Oncor was awarded the rights to build 25 percent of the CREZ lines, totaling 1,037 miles Completion of the CREZ lines eliminated the congestion of transmission.103 The transmission segment that the and curtailment and unlocked an additional 18,000 MW Amazon Wind Farm connects with brought over $1 billion of capacity.97 Previously untapped wind-rich regions of investment and over 1,500 peak year jobs to the state.104 were now open for business, breeding competition and
TRANSMISSION REPORT | 33 CASE STUDIES Southwest Power Pool (SPP)
The Hitchland-Woodward line was a $64 million investment, enabling development of additional wind power.
SPP: HITCHLAND- The Bluestem wind farm was a $350 million investment that WOODWARD created 300 peak year jobs. TRANSMISSION LINE ENABLES GOOGLE TO PROCURE LOW-COST RENEWABLE ENERGY
EXECUTIVE SUMMARY purchases, in five different countries across three continents, will total over $3.5 billion in capital investment, Recently completed transmission projects, such as the and generate tens of millions of dollars in local taxes and Hitchland-Woodward line in the Southwest Power Pool land lease payments.108 Google’s long-term goal is to power (SPP), have enabled the development of low-cost wind their operations on a region-specific, 24/7 basis with clean, projects. These projects, in turn, have attracted the zero-carbon energy.109 But to achieve this more challenging attention of corporates buyers with renewable energy goal in a cost-effective manner, the U.S. transmission goals such as Google. As noted, corporate purchasers have infrastructure will likely need further upgrades and set a 60 GW goal for renewable energy purchases by 2025, expansion to enable access to more low-cost renewable and will likely continue to heavily rely on wind and solar resources. energy generated in SPP to meet that demand. Much of these resources reside in states located within SPP, and recent transmission upgrades and expansion BACKGROUND AND CONTEXT have just begun to unlock their potential. Between 2012 and 2014, utilities in SPP spent $700 million on In 2012, Google, the search engine and technology transmission improvements, an 84 percent increase company, pledged it would purchase enough renewable compared to 2009–2011 spending.110 energy to meet 100 percent of the electricity needs of its operations.105 Google seeks to accomplish two important Oklahoma and Kansas particularly benefitted from goals in every renewable energy purchase: create these investments. As a result, 30 and 25 percent of the additionality and the highest possible positive impact on electricity generated in Oklahoma and Kansas, respectively, the renewable energy industry.106 Through direct energy comes from wind power.111 Development is not expected purchases, renewable energy certificates, and partnerships to slow down in these states, either. By 2021, installed wind with utilities to purchase renewables, Google will achieve capacity in the two states is expected increase another 9 their goal by the end of 2017.107 Their renewable energy percent.112
34 | TRANSMISSION REPORT Xcel Energy and Oklahoma Gas & Electric were responsible early 2017.117 The wind farm represented a $350 million for developing several of the SPP transmission projects, investment and created 300 peak year jobs.118 including a project to improve energy access in the Oklahoma Panhandle.113 One of these projects, the Without the Hitchland line, however, the Bluestem Hitchland-Woodward line, improved regional reliability project would not likely have been built. Bluestem and helped enable the development of more low-cost project developer, RES Americas, had leased land in wind power, including the Bluestem Wind Farm.114 Google the Panhandle knowing that their potential projects now purchases the power generated by Bluestem. were only possible if additional transmission lines were completed.119
In 2008, a study developed for SPP recommended the MAKING THE INVESTMENT construction of a transmission line between the Hitchland Completed in May 2014, the Hitchland-Woodward line and Woodward substations because models of the current was a $64 million investment that enabled Xcel Energy to and potential wind output in the Oklahoma Panhandle 120 idle less efficient plants in the off-peak season, boost grid overloaded transmission capacity. Based on that reliability, and import greater supplies of less expensive recommendation, Xcel Energy began development of the power from neighboring power plants.115 It also enabled project and in May 2014, the Hitchland-Woodward line the development of the Bluestem Wind Farm.116 went into service. Nineteen months later, construction of the Bluestem Wind Farm began, directly connecting to Located in Beaver County, Oklahoma, and connected to the Hitchland-Woodward line.121 Around the same time, the Hitchland-Woodward line, the Bluestem Wind Farm is RES Americas, the developer, struck a long-term PPA with a 60 turbine, 198 MW project that was brought online in Google for the project.122
TRANSMISSION REPORT | 35 XII. CONCLUSION
Our analysis finds that 1. Corporate demand for cheap, clean renewable energy is growing. upgrading and expanding transmission is essential to 2. Renewable energy production and potential is concentrated in the central deliver significant amounts of U.S. region, far from most future electricity demand. new renewable energy to large 3. New transmission is needed to meet this growing demand. customers. Four key findings arose from this analysis: 4. Transmission planners are typically not incorporating this rising tide of voluntary corporate renewable energy demand into plans to build new transmission.
Based on these findings, we • Encourage transmission planners and state Public Service Commissions to recommend that corporate increase access to affordable, renewable energy by approving upgrades and buyers and other large expansion to transmission lines; institutional customers: • Participate in regional and inter-regional transmission planning conversations to ensure future transmission infrastructure meets customer demand for renewable energy; and
• Urge FERC to continue work to improve interregional planning processes consistent with Order 1000.
We recommend that operators • Incorporate voluntary, large customer demand in transmission planning. of Regional Transmission Organizations: • Strengthen planning across RTOs and other regional planning authorities to ensure efficient interregional transmission.
36 | TRANSMISSION REPORT XIII. RESEARCH METHODOLOGY
This report, which focuses primarily on the Eastern Interconnection and ERCOT, is based on reviews of online literature on transmission, as well as a series of interviews with companies, RTOs, and ISOs. See Appendix B for a list of interviewees.
XIV. APPENDIX A: INTERVIEWS
DGA and WEF interviewed the following experts to inform this analysis:
Warren Lasher, Senior Director of System Planning, ERCOT Lanny Nickell, Vice President, Engineering, SPP Mark Lawlor, Vice President, Development, Clean Line Ron Stimmel, Senior Program Manager, Global Renewable Energy Strategy, Amazon Neha Palmer, Head of Energy Strategy, Google Michael Terrell, Head of Energy Market Development, Google Jayshree Desai, Chief Operating Officer, Clean Line Energy Partners Bill White, Director of Business Development, Northeastern United States, CTC Global
TRANSMISSION REPORT | 37 XV. ACKNOWLEDGEMENTS
LEAD AUTHORS: David Gardiner and Associates – David Gardiner, Ryan Hodum, Alexandra Rekkas, Will Sherman
LEAD CONTRIBUTORS: David Gardiner and Associates – Alan Nogee Wind Energy Foundation – John Kostyack, Kevin O’Rourke, David Golembeski American Wind Energy Association – Michael Goggin, Betsy Beck, Hannah Hunt
REPORT REVIEWERS: Rob Gramlich, Grid Strategies, LLC John Moore, Sustainable FERC John Jimison, Americans for a Clean Energy Grid Joshua Kaplan, World Wildlife Fund
REPORT DESIGN: Cater Communications, Inc. – Sarah Golden and Cristen Farley
ABOUT THE ORGANIZATIONS:
Wind Energy Foundation
The Wind Energy Foundation is a 501c3 nonprofit organizations dedicated to raising public awareness of wind as a clean, domestic energy source through communication, research, and education. The Foundation is also committed to supporting ongoing research that furthers the continued growth of wind energy. For more information, visit www.windenergyfoundation.org. A Renewable America (ARA), a campaign to educate on the economic benefits of the growing wind and solar industries and the transmission and storage technologies that support them, is a project of the Foundation. To learn more, visit: www.arenewableamerica.org.
David Gardiner and Associates
David Gardiner and Associates is a strategic advisor to organizations seeking a sustainable future. We are focused on climate change, clean energy, and sustainability. Our clients are non-profits, corporations, and trade associations. Our non-profit clients include advocacy organizations and foundations, while our corporate clients include clean energy companies and corporations committed to sustainability. We help our clients develop their strategies, conduct research and analysis, and improve their communications through our writing expertise, partnership building, and advocacy. Our team integrates decades of practical experience across business sectors with diverse subject expertise resulting in highly-tailored products or deliverables meeting the specific needs of each client. For more information, visit www.dgardiner.com.
38 | TRANSMISSION REPORT TRANSMISSION REPORT | 39 ENDNOTES
1 Offshore wind energy is outside of the scope of this 11 David Gardiner and Associates, The Growing Demand paper. for Renewable Energy Among Major U.S. and Global Manufacturers, September 19, 2017, http://bit. 2 World Wildlife Fund (WWF), Ceres, Calvert ly/2wGqNuu. Investments, and CDP, Power Forward 3.0: How the largest U.S. companies are capturing business value 12 Apex Clean Energy and GreenBiz Group, 2017 State of while addressing climate change, April 2017 https:// Corporate Renewable Energy Procurement, September www.worldwildlife.org/publications/power-forward- 2017, http://bit.ly/2zzzx2C. 3-0-how-the-largest-uscompanies-are-capturing- business-value-while-addressing-climate-change. 13 Business Council for Sustainable Energy (BCSE), 2017 Sustainable Energy in America Factbook, February 2017, 3 Rocky Mountain Institute’s Business Renewables www.bcse.org/sustainableenergyfactbook/; see also, Center, BRC Deal Tracker, 2017, http:// average capacity and consumption calculation supra businessrenewables.org/corporate-transactions/; note 3. Assuming average capacity of a coal-fired power plant is 547 MW (http://www.ucsusa.org/clean_energy/ 14 Id.; American Wind Energy Association, U.S. coalvswind/c01.html#.WdgADRNSyRs) and assuming Wind Industry Fourth Quarter 2016 Market Report, average annual electricity consumption for a U.S. January 26, 2017, http://awea.files.cms-plus. residential utility customer was 10,812 kWh (https:// com/FileDownloads/pdfs/4Q2016%20AWEA%20 www.eia.gov/tools/faqs/faq.php?id=97&t=3): 10,812 Market%20Report%20Public%20Version.pdf. kWh/yr ÷ 8,760 hours/yr = 1.2 kW = 0.0000012 GW. 15 BCSE supra note 13. 4 Corporate Renewable Energy Buyers’ Principles, About 16 General Motors, GM’s Ohio and Indiana Plants to Meet Us, 2017, http://buyersprinciples.org/about-us/. Electricity Needs with Wind, September 19, 2017, http:// 5 There are opportunities for advanced transmission www.gm.com/mol/m-2017-sep-0919-wind.html. technologies (e.g., advanced conductors, dynamic 17 BCSE supra note 13. line rating systems, flexible alternating transmission system devices) to deliver more renewable energy 18 Anheuser-Busch, Anheuser-Busch and Enel Green over existing transmission, which are not fully Power Announce Renewable Energy Partnership, realized given current FERC regulations. Advanced September 13, 2017, http://www.anheuser-busch. transmission technologies can complement grid com/newsroom/2017/09/anheuser-busch-and-enel- upgrades and support increased electricity delivery green-power-announce-renewable-energy-pa.html. prior to new transmission being permitted and constructed. However, note that quantification of 19 Kimberly-Clark, Kimberly-Clark to Power North capacity available through transmission upgrades is American Mills with Renewable Wind Energy, September beyond the scope of this report. 14, 2017, http://investor.kimberly-clark.com/ releasedetail.cfm?ReleaseID=1040411. 6 RE100, Companies, 2017, http://there100.org/ companies. 20 Lazard, Lazard’s Levelized Cost of Energy Analysis— Version 11.0, November 2017, https://www.lazard. 7 Renewable Energy Buyers Alliance (REBA), Making com/media/450337/lazard-levelized-cost-of-energy- clean and renewable energy the new normal, http:// version-110.pdf. rebuyers.org/; BCSE supra note 10. 21 Id. 8 UtilityDive, Westar proposes new wind offering for large C&I customers, November 20, 2017, https://www. 22 Although Arkansas and Louisiana do not have strong utilitydive.com/news/westar-proposes-new-wind- wind technical potential, they have significant solar offering-for-large-ci-customers/511308/. potential and due to their geographic locations and solar potential, they are included in this group. 9 WWF et al. supra note 2.
10 WWF et al. supra note 2.
40 | TRANSMISSION REPORT 23 Gillis, J. and Popovich, N, In Trump Country, Renewable 43 Id. Energy Is Thriving, June 6, 2017, https://www.nytimes. com/2017/06/06/climate/renewable-energy-push-is- 44 Id.; assuming average capacity of a coal-fired power strongest-in-the-reddest-states.html. plant is 547 MW, http://www.ucsusa.org/clean_ energy/coalvswind/c01.html#.WdgADRNSyRs; the 24 Offshore wind energy is outside of the scope of this queues surveyed include PJM Interconnection (PJM), paper. Midcontinent Independent System Operator (MISO), New York ISO (NYISO), ISO-New England (ISO-NE), 25 SPP, Generation Mix Historical, 2017, https:// California ISO (CAISO), Electric Reliability Council of marketplace.spp.org/pages/generation-mix-historical; Texas (ERCOT), Southwest Power Pool (SPP), Western note that SPP collects data in 5-minute intervals. Area Power Administration (WAPA), Bonneville Power Administration (BPA), Tennessee Valley Authority 26 AWEA, Evolution of the Corporate Wind PPA: Market (TVA), and 25 other individual utilities. Insights, https://www.awea.org/evolution-of- corporate-wind-ppa-market-insights. 45 DOE, 2016 Wind Technologies Market Report, 2016, https://emp.lbl.gov/sites/default/files/2016_wind_ 27 Id. technologies_market_report_final_optimized.pdf. 28 Id. 46 Id. 29 Id. 47 Id. 30 Id. 48 Id.; The queues surveyed include PJM Interconnection 31 Energy Smart Blog, A Practical Guide to Renewable (PJM), Midcontinent Independent System Operator Energy Terms: What are PPAs, Virtual PPAs, and RECs?, (MISO), New York ISO (NYISO), ISO-New England June 27, 2016, http://bit.ly/2xkAQS1. (ISO-NE), California ISO (CAISO), Electric Reliability Council of Texas (ERCOT), Southwest Power Pool 32 AWEA supra note 26. (SPP), Western Area Power Administration (WAPA), Bonneville Power Administration (BPA), Tennessee 33 Id. Valley Authority (TVA), and 25 other individual utilities. 34 Id. 49 Note that actual renewable build and transmission 35 Forbes, What Apple's PPA With First Solar Could Mean growth may be ahead of current RPS requirements For The Utility-Scale Solar Industry, February 11, 2015, depending on the state. http://bit.ly/2iYChnA. 50 AWEA, AWEA State RPS Market Assessment 2017, 36 AWEA supra note 26. September 26, 2017, https://www.awea.org/rps2017.
37 Id. 51 Renewable Energy Buyers Alliance (REBA), Making clean and renewable energy the new normal, http:// 38 Americans for a Clean Energy Grid, The ACEG Vision rebuyers.org/; BCSE supra note 13. of the Grid, 2017, https://cleanenergygrid.org/wp- content/uploads/2017/11/2017-2018-ACEG-Policy- 52 Lazard supra note 20. Agenda.pdf. 53 EIA, Annual Energy Outlook 2017 with projections to 39 Federal Energy Regulatory Commission (FERC), Order 2050, January 5, 2017, https://www.eia.gov/outlooks/ No. 1000 - Transmission Planning and Cost Allocation, aeo/pdf/0383(2017).pdf. October 26, 2016, https://www.ferc.gov/industries/ 54 Interview with Southwest Power Pool (SPP), electric/indus-act/trans-plan.asp. September 2017. 40 Id. 55 Id. 41 Navigant, Transmission Planning White Paper, January 56 National Renewable Energy Laboratory (NREL), Review 2014, https://pubs.naruc.org/pub.cfm?id=53A151F2- and Status of Wind Integration and Transmission in the 2354-D714-519F-53E0785A966A. United States: Key Issues and Lessons Learned, March 42 DOE, Wind Vision: A New Era for Wind Power in the 2015, https://www.nrel.gov/docs/fy15osti/61911.pdf. United States, 2013, https://energy.gov/eere/wind/ maps/wind-vision.
TRANSMISSION REPORT | 41 57 American Wind Energy Association and Wind 71 AWEA, Renewable Energy Builds a More Reliable Coalition, comments to the Federal Energy Regulatory and Resilient Electricity Mix, May 2017, http://bit. Commission, June 28, 2016, https://www.ferc.gov/ ly/2w0aapX. CalendarFiles/20160627085909-Gaw,%20Wind%20 Coalition.pdf. 72 MISO supra note 65.
58 Edison Electric Institute, Transmission Projects: At 73 MacDonald, A. E. et al, Future cost-competitive electricity systems and their impact on US CO a Glance, December 2016, http://www.eei.org/ 2 issuesandpolicy/transmission/Documents/Trans_ emissions, January 25, 2016, http://www.nature. Project_lowres_bookmarked.pdf. com/nclimate/journal/v6/n5/full/nclimate2921. html?foxtrotcallback=true. 59 Southwest Power Pool, The Value of Transmission, January 26, 2016, https://www.spp.org/ 74 Great Plains Institute, New Midwest Transmission Lines documents/35297/the%20value%20of%20 to Replace Retiring Coal Plants with Wind Power, July transmission%20report.pdf. 2015, http://bit.ly/2m1lGjK.
60 Id. 75 Synapse Energy Economics, Inc., The Net Benefits of Increased Wind Power in PJM, May 9, 2013, http://bit. 61 Monies, P., Regional electricity market leading to lower ly/2Ai0Hvj. prices, Oklahoma utilities say, July 28, 2016, http:// newsok.com/article/5511560. 76 Clean Line Energy Partners, Grain Belt Express Clean Line: Benefits, 2017, http://www. 62 SPP, Modernizing the Grid: The Value of Transmission, grainbeltexpresscleanline.com/site/page/benefits. 2016, https://www.spp.org/documents/35296/ modernizing%20the%20grid%20-%20the%20 77 Id. value%20of%20transmission.pdf; SPP supra note 59. 78 Grain Belt Express Clean Line LLC, Verified Application 63 Id. of Grain Belt Express Clean Line LLC For a Certificate of Public Convenience and Necessity to Construct, Operate 64 Midcontinent Independent System Operator and Maintain a High Voltage Electric Transmission Line (MISO), Multi Value Project Portfolio Analysis, and Operate a Transmission Public Utility Business and https://www.misoenergy.org/planning/ Authorizing Grain Belt Express Clean Line to Construct transmissionexpansionplanning/pages/mvpanalysis. the Electric Transmission Line, April 10, 2015, http:// aspx. bit.ly/2B8060r; This total excludes costs for network upgrades required by RTO interconnection processes. 65 MISO, 2017 MVP Triennial Review Report, 2017, http:// bit.ly/2gOwLCW. 79 MISO supra note 65.
66 EIA, Electric Power Monthly, September 26, 2017, 80 GM supra note 16. https://www.eia.gov/electricity/monthly/epm_table_ grapher.php?t=epmt_5_6_a. 81 Edison Electric Institute, Transmission Projects: At a Glance, December 2016, http://www.eei.org/ 67 ReNew Wisconsin, Badger Coulee Factsheet, issuesandpolicy/transmission/Documents/Trans_ October 2014, http://www.renewwisconsin.org/ Project_lowres_bookmarked.pdf. pdf/BadgerCouleeFactSheet.pdf. 82 MISO, Multi Value Project Portfolio Analysis, 68 American Transmission Company (ATC), https://www.misoenergy.org/Planning/ Arrowhead-Weston Transmission Line Benefits TransmissionExpansionPlanning/Pages/MVPAnalysis. Report, February 2009, http://www.atc-projects. aspx. com/wp-content/uploads/2012/01/AW_FINAL. pdf. 83 MISO, 2017 MVP Triennial Review Report, 2017, http:// bit.ly/2gOwLCW. 69 ITC Holdings, Inc. ITC Benefits Study, October 2016, http://www.itc-holdings.com/docs/default-source/ 84 Id. case-studies/icf-benefits-study-for-itc.pdf?sfvrsn=0. 85 Id. 70 SPP supra note 62. 86 Amazon, Energy and Environment, https://www. amazon.com/p/feature/gkkwdp34z5ou7ug.
42 | TRANSMISSION REPORT 87 Id. 102 PUCT, Dermott Wind, LLC - Registration Form for Power Generation Companies and Self-Generators, October 88 ERCOT, The Texas Competitive Renewable 2016, http://interchange.puc.state.tx.us/WebApp/ Energy Zone Process, September 2017, https:// Interchange/Documents/46571_1_918243.PDF at 5; cleanenergysolutions.org/sites/default/files/ Dermott Wind, LLC., Local Government Assistance and documents/jeff-billo_webinar-ercot-crez-process.pdf. Economic Analysis, March 2016, https://comptroller. texas.gov/data/economy/...dermott/snyder-1128- 89 Greening the Grid, Renewable Energy Zones: Delivering dermott-app.pdf at 35. Clean Power To Meet Demand, May 2016, http:// greeningthegrid.org/resources/factsheets/renewable- 103 Oncor Delivery Services, Texas Benefits from Massive energy-zones. Renewable Energy Transmission Project, March 2014, http://thewire.oncor.com/News/Pages/ 90 Id. Texas-Benefits-from-Massive-Renewable-Energy- 91 Texas State Legislature, SB 20, July 2005, http://www. Transmission-Project-032814.aspx. capitol.state.tx.us/tlodocs/791/billtext/pdf/SB00020F. 104 Id. pdf#navpanes=0. 105 Google, Achieving Our 100% Renewable Energy 92 Texas State Legislature, Senate Committee Report - Purchasing Goal and Going Beyond, December 2016, Witness List, June 2005, http://www.capitol.state.tx.us/ https://static.googleusercontent.com/media/www. tlodocs/791/witlistbill/html/SB00020S.htm. google.com/en//green/pdf/achieving-100-renewable- 93 Texas State Legislature, State Senate Vote – SB 20, energy-purchasing-goal.pdf. July 2005, http://www.journals.senate.state.tx.us/ 106 Google, Google’s Green PPA: What, How, and Why, sjrnl/791/pdf/1sj07-12-f.pdf#page=6 at 6. September 2013, https://static.googleusercontent. 94 Oncor Energy Deliver, CREZ Implementation com/media/www.google.com/en//green/pdfs/ Background, http://www.oncor.com/EN/Pages/CREZ- renewable-energy.pdf at 3. Implementation-Background.aspx. 107 Google supra note 105. 95 Greening the Grid supra note 89. 108 Id. 96 Rocky Mountain Institute (RMI), Transmission 109 Id. Investments Affect The Value Of Your Wind PPA, March 2017, http://businessrenewables.org/wp-content/ 110 RMI supra note 96. uploads/2017/05/BRC_ValueofWindPPA_InsightBrief_ Final.pdf. 111 AWEA, State Factsheets, 2017, https://www.awea.org/ resources/statefactsheets.aspx?itemnumber=890&na 97 Oncor Delivery Services, Texas Benefits from Massive vItemNumber=5051. Renewable Energy Transmission Project, March 2014, http://thewire.oncor.com/News/Pages/ 112 RMI supra note 96. Texas-Benefits-from-Massive-Renewable-Energy- Transmission-Project-032814.aspx. 113 Xcel Energy, Joint transmission project benefits Xcel Energy customers, May 2014, http:// 98 Greening the Grid supra note 89. www.powerfortheplains.com/resources/ collateral/05-22-2014.pdf at 1; see also, Xcel Energy, 99 RMI supra note 96. Power for the Plains, http://www.powerfortheplains. com/projects/index.asp. 100 PUCT, Fillings Docket http://interchange.puc.texas. gov/WebApp/Interchange/application/dbapps/filings/ 114 Id. pgSearch.asp; see also, AWEA, Non-utility Purchasers Q1 2017 and ERCOT supra note 88. 115 Id.
101 Amarillo Globe News, Amazon announces plans for 116 PR Newswire, RES Announces Substantial Completion of Scurry County wind farm, September 2016, http:// 198 MW Bluestem Wind Project, Jan. 18, 2017, https:// amarillo.com/news/latest-news/2016-09-16/amazon- www.prnewswire.com/news-releases/res-announces- announces-plans-scurry-county-wind-farm. substantial-completion-of-198-mw-bluestem-wind- project-300392346.html.
117 Id. TRANSMISSION REPORT | 43 118 Betsy Lillian, North American Windpower, Exelon Generation Acquires 198 MW Bluestem Wind Project From RES, January 2016, http://nawindpower.com/ exelon-generation-acquires-198-mw-bluestem-wind- project-from-res.
119 Kate Galbraith, Texas Tribune, Remoteness a hurdle in harvesting panhandles winds, September 2010 https:// www.texastribune.org/2010/09/10/remoteness-a- hurdle-in-harvesting-panhandles-winds/.
120 Quanta Technology, Final Report on the SPP Updated EHV Overlay Study, March 2008, http://sppoasis. spp.org/documents/swpp/transmission/2008%20 EHV%20Study%20Final%20Report.pdf at 4; The Wind Coalition, Cost Allocation: Barriers To National Energy Progress.
121 FERC, Notice of Self-Certification of Exempt Wholesale Generator Status, October 2016, http://www.occeweb. com/pu/WindFarmNOI/BluestemWindEnergy_Notice. pdf at 1; PR Newswire, RES Announces Sale of the Bluestem Wind Project to Exelon Generation, January 2016, https://www.prnewswire.com/news-releases/ res-announces-sale-of-the-bluestem-wind-project- to-exelon-generation-300206718.html; Xcel Energy supra note 113.
122 PR Newswire supra note 116.
44 | TRANSMISSION REPORT